The Real Return

Under current law, individuals (and trust beneficiaries) who hold a CGT asset for more than 12 months pay tax on only half the capital gain at their marginal rate. Companies don't get this discount.

The 12 May 2026 Federal Budget announced that from 1 July 2027, the 50% discount will be replaced with an inflation adjustment: only the real (above-CPI) portion of the gain is taxed. For low-inflation periods this is broadly similar to the 50% discount; for periods of high inflation it can be more generous.

For sales spanning the 1 July 2027 cutoff, the calculator splits the gain proportionally — pre-cutoff days use the 50% discount, post-cutoff days use the inflation adjustment.

Status: announced, not yet legislated.

ROI on cash is the annualised return on your actual deposit — not the return on the property's total value. It's the most honest measure of how your money performed.

Formula: ((take-home profit + cash invested) / cash invested) ^ (1/years held) − 1.

It already captures all the leverage. If a property grows 5.5% p.a. but your deposit is only 20% of the purchase price, your levered return on that deposit can easily exceed 12-15% p.a. — that's the magic of borrowing to buy an appreciating asset. The "Leverage effect" stat in the hero shows the gap between property growth and ROI on cash.

Take-home profit = (sale price − selling costs − loan payout − CGT) + cumulative after-tax cashflow − cash invested.

It accounts for:

• The cash you walk away with at sale (after paying off the loan, CGT, and agent fees)
• Plus all the rental cashflow during the hold (negative for most investment property)
• Minus your original deposit (so we're measuring real profit, not gross proceeds)

The same definition runs through the hero, the compare cards, and the structure comparison table — every dollar figure ties back to this formula.

The calculator uses published 2025-26 investor (non-FHB) rates for each state and territory:

• NSW — marginal brackets, top investor rate ~5.5% above $1.24M
• VIC — five brackets including the flat 5.5% band for purchases $960k-$2M
• QLD — standard transfer duty, no home concession
• WA, SA, TAS, ACT, NT — each state's marginal schedule

The figure is auto-populated when you change purchase price or state, and is editable if you have the exact figure from your conveyancer. Foreign purchaser surcharges (typically 8-9%) are not included — let your accountant know if those apply to you.

Land tax is assessed annually on the land value (not purchase price) of all the property you own in that state. The calculator estimates land value at 60% of purchase price by default — edit it if you have the council valuation.

Entity matters significantly because most states penalise trusts:

• NSW — individuals & companies: $1,075,000 threshold. Discretionary trusts: no threshold, 1.6% from $1.
• VIC — individuals & companies: $50,000 threshold. Trusts: $25,000 threshold plus a 0.375% surcharge.
• QLD — individuals: $600k threshold. Trusts & companies: $350k threshold.
• SA — individuals: $732k threshold. Trusts: $25k threshold with higher rates.
• ACT — trusts pay an additional surcharge.
• WA, TAS — same treatment for all entities.
• NT — no land tax.

The "Other land already held" field lets you aggregate. Land tax is calculated on your total land in that state, with the marginal portion attributed to this property.

Three reasons stack up:

1. Negative gearing is trapped — losses can't offset your wage income. Personal investors get a real tax refund each year; trust investors don't. Over 6 years this can be a $50-80k gap in cashflow.
2. Land tax is harsher — NSW, VIC, SA and QLD all penalise trusts with lower thresholds or surcharges, adding thousands per year.
3. 30% minimum tax from 1 July 2028 — even when you stream gains to a low-income beneficiary, they now pay at least 30%, neutralising the main reason people use discretionary trusts.

Trusts still make sense for asset protection, estate planning, and positively-geared portfolios. For a single negatively-geared property, personal ownership is usually more tax-efficient.

Announced in the 2026 Budget, effective 1 July 2028. The trustee of a discretionary trust will pay a minimum 30% tax on distributions to beneficiaries. Beneficiaries receive a non-refundable credit for that tax.

Practical effect:

• If the beneficiary's marginal rate is already 30%+, no change.
• If the beneficiary's marginal rate is below 30% (e.g. low-income family members), the trust still pays 30% and they can't recover the difference. The streaming advantage largely disappears.

The calculator applies this floor automatically for sales/distributions on or after 1 July 2028. Excluded trust types (fixed, testamentary, charitable) aren't modelled.

Status: announced, not yet legislated.

When a trust or company has more deductions than income (typical for negatively-geared property), the resulting loss is trapped inside that entity. It can't reduce your personal tax bill — that's the entire trade-off of using a trust or company structure.

The trapped loss can be recovered by future income in the same entity:

• Other rental properties owned by the same trust generating rent
• Business income earned by the trust (e.g. consulting, services, trading)
• Investment income — dividends, interest, distributions

Key constraint: trust revenue losses generally can't offset capital gains. They sit in different tax buckets. So a $200k capital gain on sale won't absorb $85k of accumulated rental losses — those losses keep waiting for future revenue income.

If the trust is wound up before generating enough revenue to absorb the losses, they expire unused.

Yes — this is one of the legitimate ways to recover trapped revenue losses. Business profits generated inside the same trust are revenue income, and the carry-forward losses can offset them.

Caveats:

• The business must be genuine — real customers, real commercial purpose
• The trust must pass trust loss tests (control test, pattern of distributions, 50% stake, or income injection test). Most family trusts under stable control will pass.
• A Family Trust Election makes the loss tests simpler — many trusts already have one.
• Don't structure the business purely to absorb losses — Part IVA can deny the deduction if tax avoidance is the dominant purpose.

Always get specific advice from your accountant before relying on this.

Generally no. Each trust is its own tax entity. Losses can't be moved between trusts, and you can't simply route profits through a loss-trust to absorb them. The ATO specifically prevents this via anti-avoidance rules (Part IVA, income injection test).

Limited exceptions exist:

• Family Trust Election (FTE) group — trusts that share the same test individual can sometimes flow distributions in ways that benefit the loss trust
• Commercial loans between trusts — at arm's-length interest rates, with proper documentation, can shift interest income to the loss trust
• Buying new income-producing assets inside the loss trust — the cleanest practical path

This is exactly the kind of question to take to a tax adviser who specialises in trusts.

Yes — depreciation is a tax deduction in all three structures. What differs is what happens to the resulting loss:

• Personal — losses offset your wage income at marginal rate → real tax refund during the hold. Depreciation directly improves cashflow.
• Trust — losses are trapped, carry forward against future trust revenue. Depreciation creates more carry-forward losses, no immediate benefit.
• Company — same as trust. Losses carried forward at the company level.

So depreciation is structurally most valuable for personal investors who can monetise the loss every year.

No. This is a general-information tool for understanding how the proposed Budget 2026 changes might affect property investment outcomes if they pass Parliament. It uses simplified assumptions (interest-only loans, average annual figures, standard rates) and doesn't model many edge cases — foreign purchaser surcharges, first-home buyer concessions, PPOR exemptions, fixed-trust treatment, division 7A loans, fringe benefits tax, and many others.

Before making any investment, structure, or tax decision, speak to a licensed financial adviser, accountant, or solicitor who can review your full personal circumstances. The calculator is the intellectual property of Emil Josef and is provided as a thinking aid, not a substitute for professional advice.